Md. lawmaker to try to ban 'sweepstakes' game rooms

A Maryland legislator said he plans to introduce a bill in the General Assembly that would outlaw video game rooms that offer cash prizes for playing a "sweepstakes," saying such operations could effectively put "slots on every corner."

Del. Eric G. Luedtke, a Montgomery County Democrat, said he's been working on the legislation since summer, after hearing about lawmakers in Florida trying to ban the "Internet sweepstakes cafes" that have opened across the state. In the Baltimore area, the first of the game rooms apparently opened in the city about a year ago, and three more appeared this fall, two in the city, one in Baltimore County.

Luedtke, a member of the House subcommittee that deals with gambling legislation, said he believes prosecutors could shut the rooms down under current law but expressed concern that it might not be clear, enabling operators to use "a loophole to create backdoor slots." When Marylanders voted to legalize slots, they voted to legalize slots in certain places, he said.

"This is not the sort of thing we want to see on every corner," Luedtke said. "These have the potential to be slots on every corner."

Luedtke, a House member since January, said he plans to introduce his bill early in the 90-day legislative session, which begins next month in Annapolis. The four-page measure would make it a misdemeanor to operate, promote or set up an "electronic sweepstakes" in Maryland.

He said he's concerned about the game rooms flying under the legal radar and letting gambling go uncontrolled.

Parlors offering video games that look just like slot machines — with icons spinning in rows and point counters at the bottom of the screen — have opened without fanfare in the area. The game program turns the computer screen into a virtual slot machine, but the machines themselves do not take cash or credit cards directly, and game operators say the machines merely reveal prize awards that have already been determined in a "sweepstakes."

The game room managers say they're running a legal "sweepstakes," giving away free points that can be used in the game when customers buy time on the Internet — usually at the rate of $1 for 10 minutes. Signs posted in the rooms also give instructions on how to enter the "sweepstakes" for free through the mail.

Such game rooms have been outlawed in Virginia and Massachusetts and have faced legal challenges in other states, including Florida, North Carolina, New York and Ohio. They are relatively new in Maryland.

Last week, Baltimore Councilman Robert W. Curran said he asked city attorneys and Finance Department staff to consider whether operators should be paying the tax levied by the council last year on "simulated slot machines."

In Baltimore County, representatives of the Office of Law and the police said they were looking into what laws, fees or taxes might apply to the Hot Spot Sweepstakes game room with 70 machines that opened in October on Goucher Boulevard in Towson. The owner, Terry Land, also owns a Hot Spot with 30 machines that opened this month on Reisterstown Road in Baltimore.

The largest sweepstakes room in the area opened this fall in the city, the 111-machine Patapsco Bingo on Annapolis Road a few miles south of downtown. The first one in the area seems to have been Lucky PCs, with 25 machines, off East Baltimore Street in the city's red-light district.

Land did not return a phone call seeking comment. Bruce Bereano, who said he acts as a lobbyist for Patapsco Bingo, declined to comment. The manager of Lucky PCs did not return a call; neither did representatives of Gateway Gaming, one of the companies that produces and licenses the game programs.

Luedtke's bill specifically refers to "electronic sweepstakes," and defines "electronic terminal," "entertaining display" on a video screen and "prize," including cash or tokens redeemable for money. Existing laws define "slot machine" and make it a misdemeanor to establishing a place for gambling, but do not mention sweepstakes.

Assistant Attorney General Kathryn M. Rowe has said that Maryland case law establishes that a sweepstakes is legal if you can enter for nothing, such as tickets given away with "something you would buy anyway." If patrons were visiting the rooms chiefly to gamble rather than buy time on the Internet, that would appear to violate gambling law, Rowe said.

"It's pretty clear that the places where we've seen this, they're not selling the Internet time," Luedtke said. "The law is not 100 percent clear on it, and I think it needs to be 100 percent clear."

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